Find Legal Information

No. 3--03--1022

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2004

This is a declaratory judgment action in which plaintiffs,Edward Czerkies, as trustee under the Edward Czerkies Declarationof Trust dated May 2, 1985, and Czerkies Limited Partnership, askthe court to declare that their landlord's crop lien has priorityover all other liens, including the lien held by defendant, AGAcceptance Corporation (AGAC). The trial court found that theplaintiffs' lien had priority and granted plaintiffs' motion forsummary judgment. Only AGAC appeals.

BACKGROUND

AGAC is the holder of a promissory note in the amount of$1.2 million which was executed by William Myre, Sr., WilliamMyre, Jr., Lynda Myre and Melva Myre on March 6, 2000. Thispromissory note is secured by property owned by the plaintiffsand crops grown by the Myres. AGAC's security interest includesa lien on all crops growing or to be grown by the Myres on theproperty owned by the plaintiffs and the proceeds thereof. AGAC's lien existed prior to the planting of the 2002 crops.

The plaintiffs are owners of three parcels of farmland thatwere leased to William Myre, Sr., for the 2002 crop year. Thelease ran from March 1, 2002, through February 28, 2003. Thetotal rent of $124,847 for the three parcels was never paid. Theplaintiffs have a statutory lien upon the crops grown on theproperty pursuant to section 9--316 of the Illinois Code of CivilProcedure (735 ILCS 5/9--316 (West 2002)).

A landlord's lien on crops and proceeds created by section9--316 is a priority lien that secures the payment of rent andthe faithful performance of other lease terms. Before July 1,2001, it was not necessary to file a Uniform Commercial Code(UCC) (810 ILCS 5/1-1 et seq. (West 2000)) financing statementwith the Secretary of State's office to perfect the lien. Thelandlord's lien was a priority lien that automatically trumpedany other perfected security interests, even those preexistingthe landlord's lien. 735 ILCS 5/9--316 (West 2000).

Section 9--316 was amended twice during the relevant timeperiod. The first amendment, effective July 1, 2001, required alandlord to perfect his lien by filing a financing statement withthe Secretary of State in order for it to have priority over anyother agricultural lien or any security interest filed pursuantto article IX of the UCC. 735 ILCS 5/9--316 (West 2002). Thisversion of the statute was in effect at the time the crops wereplanted on plaintiffs' property.

A second amendment, effective on August 21, 2002, before thecrops were harvested, deleted the requirement that the landlordmust file a financing statement with the Secretary of State inorder to perfect the lien. 735 ILCS 5/9--316 (West 2002). Essentially, on August 21, 2002, the law reverted to pre-July 1,2001, status, and liens created by section 9--316 have prioritywithout the need to file the UCC financing statement.

On January 14 and 28 of 2003, plaintiffs filed UCC financingstatements with the Secretary of State.

On January 16, 2003, plaintiffs filed a three-countcomplaint for declaratory judgment, only two of which are atissue in this appeal. Count II requested the court to enter afinding that plaintiffs' statutory lien takes priority over anyother liens on the 2002 crops or proceeds of the crops raised onthe three properties owned by the plaintiffs. Count IIIrequested the court to order Cargil, Inc., which accepted thecrops grown by Myre and held the proceeds of the sale of thecrops, to issue a check to plaintiffs in the sum of $123,387.11,which is the amount of rent due. The trial court granted theplaintiffs' motion for summary judgment on all counts. ANALYSIS

A. Standard of Review

Since this case primarily deals with the interpretation of astatute and the granting of summary judgment, the proper standardof review is de novo. P.R.S. International, Inc., v. Shred PaxCorp., 184 Ill. 2d 224, 233-34, 703 N.E.2d 71, 75-76 (1998);Lucas v. Lakin, 175 Ill. 2d 166, 171, 676 N.E.2d 637, 640 (1997);General Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, 284,769 N.E.2d 18, 20 (2002).

B. Lien Priority

The crop year at issue is 2002. The crop lien came intoexistence when the crops were planted in the spring of 2002. Under both versions of the statute, the landlord's lien "shallcontinue for the period of 6 months after the expiration of theterm for which the premises are demised." 735 ILCS 5/9--316(West 2002). The lease in question ran from March 1, 2002, untilFebruary 28, 2003. The lien, therefore, came into existence whenthe crops were planted in the spring of 2002 and continued untilAugust 31, 2003.

AGAC argues that unless we find that the August 21, 2002,amendment to the statute is retroactive, we must reverse thetrial court. We disagree. We need not address the issue ofwhether the most recent statute should be applied retroactivelybecause the landlord's lien has priority under either version ofthe statute.

As AGAC admits, the only requirement for the landlord's liento have priority under the July 1, 2001, amendment was that thelandlord file the financing statement while the lien was inexistence. We hold that since the plaintiffs filed a financingstatement with the Secretary of State while the lien was inexistence, the plaintiffs' lien has priority, even if the July 1,2001, version of section 9--316 applies.

While we do not necessarily agree that applying the August21, 2002, amendment, which came into effect while the crops weregrowing, would be a retroactive application of that statute, weneed not decide that issue in light of our holding here.

B. Summary Judgment

Next, AGAC claims that the plaintiffs' motion for summaryjudgment should not have been granted because there remains amaterial issue of fact. AGAC claims that the plaintiffs did notestablish that the money in question actually came from cropsgrown on plaintiff's property. We disagree.

The plaintiffs submitted two affidavits in support of theirmotion for summary judgment to establish that five checks issuedby Cargil, Inc., in the amount of $123,387.11 represent proceedsfrom the sale of crops grown by the Myres on the plaintiffs'property in 2002. The first affidavit, by Edward Czerkies,states that the Myres farmed his land in 2002, that the rent hadnot been paid and that he was given five checks issued by Cargil,Inc., to the Myres, AGAC and Edward Czerkies or the CzerkiesLimited Partnership for the rent totaling $123,387.11. Thechecks were attached to the affidavit as exhibits. Czerkiesstated that he was unable to cash the checks because they werenot endorsed by all the payees. The second affidavit, by WilliamMyre, Sr., establishes that the five checks represent theproceeds from the grain he harvested from the plaintiffs' farmsin the fall of 2002. Under Supreme Court Rule 191(b), anaffidavit is taken as true unless it is opposed by sworntestimony or an affidavit complying with Rule 191(b). 145 Ill.2d R. 191(b); Wooding v. L&J Press Corp., 99 Ill. App. 3d 382,385, 425 N.E.2d 1055, 1058 (1981).

AGAC failed, however, to submit any evidence other than anaffidavit of its attorney to refute that the checks in questionactually represent the proceeds from the sale of crops grown onthe plaintiffs' property in 2002. An affidavit signed by aparty's attorney which makes general assertions about furtherdiscovery and does not state what a witness or party will testifyto if sworn and is not signed by a party is insufficient torefute an affidavit in support of a summary judgment motion. Giannoble v. P&M Heating & Air Conditioning, Inc., 233 Ill. App.3d 1051, 1064, 599 N.E.2d 1183, 1192 (1992); Schultz v. HennessyIndustries, Inc., 222 Ill. App. 3d 532, 543, 584 N.E.2d 235, 243(1991). Plaintiffs' affidavits are therefore uncontroverted andmust be taken as true. Wooding v. L&S Press Corp., 99 Ill. App. 3d at 385-86, 425 N.E.2d at 1058.

CONCLUSION

For the foregoing reasons, the judgment of the circuit courtof La Salle County is affirmed.

Affirmed.

HOLDRIDGE, P.J., and SLATER, J., concur.